Correlation Between Superior Plus and KKR Co
Can any of the company-specific risk be diversified away by investing in both Superior Plus and KKR Co at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Superior Plus and KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and KKR Co LP, you can compare the effects of market volatilities on Superior Plus and KKR Co and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Superior Plus with a short position of KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and KKR Co.
Diversification Opportunities for Superior Plus and KKR Co
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Superior and KKR is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP and Superior Plus is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Superior Plus Corp are associated (or correlated) with KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of Superior Plus i.e., Superior Plus and KKR Co go up and down completely randomly.
Pair Corralation between Superior Plus and KKR Co
Assuming the 90 days horizon Superior Plus Corp is expected to generate 0.69 times more return on investment than KKR Co. However, Superior Plus Corp is 1.45 times less risky than KKR Co. It trades about -0.16 of its potential returns per unit of risk. KKR Co LP is currently generating about -0.46 per unit of risk. If you would invest 414.00 in Superior Plus Corp on November 27, 2024 and sell it today you would lose (22.00) from holding Superior Plus Corp or give up 5.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. KKR Co LP
Performance |
| Timeline |
| Superior Plus Corp |
| KKR Co LP |
Superior Plus and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and KKR Co
The main advantage of trading using opposite Superior Plus and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus position performs unexpectedly, KKR Co can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KKR Co will offset losses from the drop in KKR Co's long position.| Superior Plus vs. SANOK RUBBER ZY | Superior Plus vs. APPLIED MATERIALS | Superior Plus vs. WILLIS LEASE FIN | Superior Plus vs. FUYO GENERAL LEASE |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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